Argentina’s president-elect wants public companies to be in private hands, with the media leaving first

Buenos Aires (Argentina) – Right-wing elected president of Argentina He gave the first indications on Monday about how he plans to start shaking up South America’s second-largest economy: through a series of privatizations.

Populist Javier MileyHe is a libertarian economist and describes himself as an “anarcho-capitalist.” He won the presidential runoff The election is on Sunday with 55.7% of the vote. He said on Monday that he would move quickly to privatize the country’s state-owned media and looked to do the same with other public companies.

“Everything that can be in the hands of the private sector will be in the hands of the private sector,” Miley told Radio Miter in Bueno Aires.

Experts immediately wondered how far Miley would go in achieving this vision without the support of the Argentine National Congress, where his party holds a relatively small share of the seats. However, some analysts said his landslide election victory could give him leverage.

“The decisiveness of victory – which was in doubt until yesterday – allows him to send a signal to all parties that control the transition period and the formation of the government,” said Mariano Machado, principal analyst for the Americas at Verisk Maplecroft, a global risk management firm. Intelligence company.

In his radio comments, Miley described the public media he wanted to make private as amounting to a “secret propaganda ministry.” He complained during the presidential race that Covering his election campaign In state-run outlets it was very negative.

Miley also indicated that he intends to work on some of his more controversial ideas from his campaign Reducing the size of the state And curbing inflation, which exceeded triple digits in Argentina. These changes include reducing the number of government ministries by half, to eight.

He said he still wants to close Argentina’s central bank, calling it a “moral decision,” but appears to have put his plans to replace the local currency, the peso, with the US dollar on the back burner.

“Conceptually, the central pivot is the closure of the central bank and, therefore, the currency that Argentines freely choose,” he said, describing the potential change in the national currency as a “second-order issue.” “

Milley predicted it would take up to half of his presidential term — “between 18 and 24 months” — to bring down inflation, which opinion polls showed was the biggest concern. For Argentine voters Consumer prices rose by 140% over the past year.

“We are reducing the size of government and eliminating taxes,” Diana Mondino, a lawmaker from Miley’s Freedom Progress Party who is widely seen as Miley’s nominee for secretary of state, wrote on social media. She posted a photo showing the newly elected president meeting with several key allies.

State-controlled energy company YPF, the country’s largest integrated energy company, is another entity that the president-elect believes should be privatized but only once its finances are shored up so it can be “sold in a very, very beneficial way to Argentines.” “.

Miley claimed that the company’s balance sheet deteriorated after the nationalization of the majority stake during the government of former President Cristina Fernández de Kirchner, who now serves as the outgoing vice president.

Monday was a public holiday in Argentina, so financial markets were not open, but shares of Argentine companies that trade in New York rose significantly. YPF saw its stock price increase by 40% after Milei talked about privatization.

There was suspense over what would happen in parallel currency markets on Tuesday given the fall in the value of the peso after Milley rocked Argentina’s political system when he won the most votes in the August primary, the first time many saw him as a potential Argentine president.

Andres Gil Dominguez, a law professor at the University of Buenos Aires, warned that Miley’s privatization plans are “largely inconsistent with the Argentine constitutional model.” He added that Congress would need to pass a law authorizing such moves.

As a relatively new political force, Miley’s Freedom Progress Party has only seven senators, less than 10% of the total number of senators, and occupies 38 of the 257 seats in the lower house of Congress.

Although support for his policies would increase if he allied with members of the main center-right opposition coalition And support his candidacy In the second round, “they don’t have enough numbers to be able to force things,” said Mariel Fornoni, of political consulting firm Management & Vet.

Milley could theoretically try to privatize companies under an emergency decree, although Congress could reject such measures on the grounds that they do not represent current emergencies.

“In this scenario, this case will certainly be litigated with an uncertain outcome,” explained Gustavo Arballo, a law professor at the National University of La Pampa.

There are other ways Milley can get around Congress.

“What could actually happen is that funding for these state-owned enterprises is gradually or suddenly halted, creating a scenario in which their operations are severely restricted,” Arballo said.

A potential privatization of YBF would be more complex. Although the state owns 51% of its shares, the state-owned stake is divided 51% to 49% between the federal government and the Argentine provinces, respectively.

“It is difficult to think about how to engineer this privatization proposal, which in no way could affect the 49% owned by the provinces,” Arballo said.

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